does Square invalidate credit card protection ?

eskbanker

PM2019 wrote: »

When I googled this it brought me to MSE....where I saw an article from 2017 in the MSE which said something like....warning section 75 through credit card payments may fail due to loophole if using third party... ....sorry tried to post the link but as new user won’t let me.

I remember the article and the associated thread, they're:

https://www.moneysavingexpert.com/news/2017/04/revealed-section-75-credit-card-protection-may-fail-due-to-payment-processing-loophole---shoppers-beware/

https://forums.moneysavingexpert.com/discussion/5639706/revealed-section-75-credit-card-protection-may-fail-due-to-payment-processing

The gist seems to be that some credit card companies are trying to wriggle out of their obligations by claiming a broken D-C-S chain when any sort of third(/fourth) party is involved, but FOS don't appear to see it that way, according to the decision quoted by Mc228 in the other thread about this:

https://www.financial-ombudsman.org.uk/files/34438/DRN0797157.pdf

However, neither FOS not the FCA appeared to be willing to get off the fence and give any clear guidance, which is obviously an unsatisfactory situation....

PM2019

Thank you Eskbanker, yes, that's exactly it...who would believe that using a third party payment processor when you don't have an account with them would cause such problems. Mc228 in the other thread which I will go to now is still waiting for resolution from the FOS - and they paid by chip and pin in the office of the retailor, whereas I am paying by telephone and via the Square online system. It leads me to feel very insecure about my chances of claiming anything back should the CH system fail. However, the other link you gave to the FOS decision on the drone purchase is encouraging.

eco_warrior

Where I work we have upheld s75 claims where the payment was made via square using chip and pin. The rest rejected as they weren’t chip or pin and so it was deemed the DSC chain was broken. No FOS overturns as yet (not to say there won’t be in the fullness of time).

I’ve prob said most of that on the other thread

PM2019

Thanks for that. My fear is that because this retailer does not have chip and pin, even I go along to their office and pay at their premises - which I intend to do for the final payment as the rest were by telephone- and input the card details myself to their terminal....that would invalidate any claim. I'm hoping to not have to claim, but it was my 'insurance' policy with them, and now I've realised because they are only 'online' ....

Ben8282

eco_warrior wrote: »

Where I work we have upheld s75 claims where the payment was made via square using chip and pin. The rest rejected as they weren’t chip or pin and so it was deemed the DSC chain was broken. No FOS overturns as yet (not to say there won’t be in the fullness of time).

I’ve prob said most of that on the other thread

I am finding it difficult to understand why.
I understand the situation with paypal and uploading funds to e-wallets, prepaid cards and the like, but I don't understand why using this particular processor should have this effect.
Customer makes a purchase and pays by credit card. The transaction has to be processed somehow. So long as the transaction is for a specific purchase and not an upload of funds to be spent later, why is there a difference? My former employer had a merchant agreement with HSBC. This company has their agreement with Square. What is the difference? Why should it matter if the transaction is chip/pin or online/telephone order etc?

eco_warrior

Ben8282 wrote: »

I am finding it difficult to understand why.
I understand the situation with paypal and uploading funds to e-wallets, prepaid cards and the like, but I don't understand why using this particular processor should have this effect.
Customer makes a purchase and pays by credit card. The transaction has to be processed somehow. So long as the transaction is for a specific purchase and not an upload of funds to be spent later, why is there a difference? My former employer had a merchant agreement with HSBC. This company has their agreement with Square. What is the difference? Why should it matter if the transaction is chip/pin or online/telephone order etc?

Hey

Re PayPal, customers can and are rejected for S75 even though they don’t have a PayPal account. They aren’t loading their own wallet but it’s still deemed as breaking the DCS chain.

Re chip and pin. There is some sort of technical difference between a card present transaction and an online based one. From memory, so don’t quote me, the online transaction settles in a Square account prior to being moved to the merchant account. It’s something along those lines. I can find out 2Moro for sure.

PM2019

Thanks Eco warrior, I'd be interested in knowing why there is a difference. It's not quite the same as 'card present' system, and probably not make any difference, but I intend to go to the merchant's office with my card and input all the details myself to their terminal because I don't want them to have my 3 digit security number either.

eco_warrior

PM2019 wrote: »

Thanks Eco warrior, I'd be interested in knowing why there is a difference. It's not quite the same as 'card present' system, and probably not make any difference, but I intend to go to the merchant's office with my card and input all the details myself to their terminal because I don't want them to have my 3 digit security number either.

Hi

It Seems someone somewhere has found there is a difference and it’s this difference that’s causing some claims to be rejected. Again I’ll try and get an answer 2moro on this that’s more detailed than my recollection posted above.

As an aside, aren’t you being a little over cautious with the CVV number?

PM2019

I might be over cautious, but I just don't trust them. Isn't there a risk with giving people the 3 digit number that they could simply input the details to your card for any amount...I don't like doing business over the phone like that...it's always seemed like a risky thing to do to me.

eco_warrior

PM2019 wrote: »

I might be over cautious, but I just don't trust them. Isn't there a risk with giving people the 3 digit number that they could simply input the details to your card for any amount...I don't like doing business over the phone like that...it's always seemed like a risky thing to do to me.

Yeah of course there is a risk but just how you quantify that risk I don’t know. To me the odds of a card being compromised online via a data breach versus a random merchant/employee stealing card would be stacked heavily toward the data breach. But again I can’t back this up with anything other than my own experience, rather than data.

One benefit of purchasing something over the phone is you have automatic chargeback rights should you wish to cancel the purchase. That’s a chargeback loophole though.